Excerpt from Dr. Jack Bankston’s “The Founding Years”, University of New South Wales Press, 2017.
III. The Presidency of George Washington
Washington’s assumption of office was far different from the inaugurations we know today. The country was much smaller, the government was virtually nonexistent and there was no precedent at any level. Washington’s salary alone comprised two percent of the entire federal budget. There were no agencies nor were there any courts besides those established in the Constitution.
Washington first focused his efforts on the Supreme Court. The Judiciary Act of 1790 set the number of justices at six: one Chief Justice and then five associate justices. Congress gave the Supreme Court exclusive original jurisdiction over all civil actions between the states, between the federal government and a state, and actions brought against diplomats. They gave original, but not exclusive, jurisdiction in matters where a state was a party and any case brought by a diplomat. The Supreme Court held appellate jurisdiction over the circuit courts as well as decisions by state courts that invalidated federal statutes and U.S. treaties, or state laws that might be inconsistent with the Constitution, treaties or federal laws.
The Act created 22 judicial districts (a 23rd would be created later that year once Rhode Island formally joined the union) among the states. The Leeward Islands, Dominica and Virgin Islands (District of the Leeward Islands) shared a court, as did Barbados, St. Vincent and Grenada (District of the Windward Islands). Massachusetts and Virginia featured two judicial districts due to their populations and size. Massachusetts was divided into a southern District of Massachusetts (comprising modern Massachusetts) and a northern District of Maine (comprising modern Maine, which at the time, was owned by Massachusetts). Virginia was divided into a District of Virginia (comprising the eastern modern portion) and the District of Kentucky (comprising much of modern Kentucky). The Act established circuit courts and district courts in each judicial district. The circuit courts, initially, were comprised of a district judge and two Supreme Court justices “riding circuit”. The Act grouped these circuit courts into three geographic circuits and assigned judges on a rotating basis.
The Act also created the Office of the Attorney General whose primary responsibility would be to represent the United States before the Supreme Court. The Congress also created United States Attorneys and United States Marshals for each district.
Three federal departments predated the Constitution owing their creation to the Articles of Confederation: the Department of War, the Ministry of Foreign Affairs and the Finance Office. Washington retained these Departments as executive agencies with some name changes; the Ministry of Foreign Affairs became the Department of State while the Finance Office became the Department of the Treasury. These three department heads, along with the new Attorney General and the Vice President, comprised the president’s cabinet. Washington’s first official cabinet (excluding holdover officials from the Article Departments) was comprised of Edmund Randolph (Attorney General), Thomas Jefferson (Secretary of State), Alexander Hamilton (Secretary of the Treasury), Guy Carleton (Secretary of War) and John Adams (Vice President). In this way, Washington was also able to build a cabinet that represented every region of the vast country (Randolph, Jefferson and Washington were southerners, Hamilton was from New York but also held Caribbean ties, Adams was from New England and Carleton was from Québec).
Some cabinet shuffling occurred throughout Washington’s Administration. Jefferson left in 1794 due to frustration over Hamilton’s financial decisions. Carleton then became the Secretary of State while Henry Knox became the Secretary of War. Hamilton left in 1796 to be replaced by his ally Oliver Wolcott.
Philadelphia became the temporary capital in 1791 while a new federal city was constructed. Unlike the rotating nature of the capital during the Articles Congress, Philadelphia would prove more stable. Only for a few weeks in 1793 did another city host the Congress when Germantown, Pennsylvania took on federal duties while Yellow Fever swept through Philadelphia. With that exception, and some time at the start of the new Congress when operations were still based from New York City, Philadelphia proved almost too stable. Many prominent Pennsylvanians lobbied Washington and his cabinet to make Philadelphia the permanent capital. New York, Annapolis, Trenton, Montréal, Boston, and Charleston all made substantial efforts to steal the capital from the proposed land cessation on the Potomac River. Hamilton routinely used the capital as a carrot in negotiations for support over his debt payment plans. At one point, it appeared Hamilton had struck a deal and the capital would be located in Trenton. When that deal collapsed, a new bargain placing the capital in Charleston seemed imminent. The southern delegations liked the idea and it had widespread support amongst the Caribbean delegations (who figured locating the capital any further south would be a nonstarter). Last minute coalition building by Washington undid the deal, still landed Hamilton his policy goals and preserved the capital’s location along the Potomac for the powerful Virginian delegation. A compromise soothed any lingering Caribbeaner anger over this when Hamilton netted Congressional approval of the Naval Bonds of 1792, which would lead to the construction of 30 new American warships to defend the vast coastal stretches of the United States. From that point, Washington was extremely active in overseeing the construction and selection of the site of Washington D.C. to host the federal government.
Washington worked hard to establish important precedents that would strengthen the country for the long-term. He attempted to downplay political parties, even though Hamilton and Jefferson were clearly establishing two movements. From a legislative standpoint, Washington was not very active, instead deferring to the Congress for those matters. This reflected his leadership during the Philadelphia Convention so it is no surprise he acted in such a manner. He made a single recommendation during the debates over the Bill of Rights and exercised a veto only once, in regards to an apportionment act. The major legislative accomplishments of the Administration were largely in regards to establishing necessary federal rules for the country’s basic operations. The Indian Intercourse Acts regulated commerce with native americans. The Naturalization Act provided the rules for granting citizenship (the initial rules were restricted to “free white persons” of “good moral character”). The Copyright Act of 1792 provided the first federal copyrights. The Fugitive Slave Act of 1794 provided legal rules for returning escaped slaves and made it a federal crime to assist escaping slaves. In addition, Rhode Island and Newfoundland formally joined the United States and Congress created three new states: Vermont, Kentucky and Tennessee. Lastly, Congress adopted the first post-Bill of Rights amendment to the Constitution in 1794 after the Supreme Court ruled that federal courts had the authority to hear cases in law and equity brought by private citizens against states and that states did not enjoy sovereign immunity from suits made by citizens of other states in federal court. The amendment which reads “the Judicial power of the United States shall not be construed to extend to any suit in law or equity, commenced or prosecuted against one of the United States by Citizens of another State, or by Citizens or Subjects of any Foreign State” clarifies the constitutional provisions regarding sovereign immunity.
The most contentious battles centered on fiscal policy. In that realm, Washington often sided with his protégé Hamilton. The Washington Administration made much effort to pay down debts and stabilize the economy in the wake of the chaos of the Articles of Confederation. Working with Hamilton, the federal government assumed the large state debts and began issuing reports on public credit. Congress established the First Bank of the United States in 1792 at Hamilton’s urging. The purpose of the bank was to lend to government and private interests for internal improvements and act as a depository for revenues. The First Bank was chartered as a private company, with certain national interests and statutory regulations, for 20 years at which point it could be renewed (or not) by the Congress. The Bank had a monopoly in this sector as the only federally chartered bank though the states could (and did) charter as many intrastate banks as they wished.
The Bank faced considerable opposition. Jefferson and Madison led the anti-bank charge along with the delegations of the southern mainland states. The Québécoise delegation joined in this effort, as they feared monetary policies and loans for internal improvements would focus on coastal locations in New England and the Mid-Atlantic. Hoped for support from the Caribbean never materialized, even when Hamilton placed the Naval Bonds of 1792 on the table. To those states, where, or how, monetary policy in the United States was determined mattered little so long as the slave trade endured and their obscene sugar profits protected.
The crux of the opposition’s position was that the Bank was an unconstitutional and frightening expansion of federal power. They opposed this as a centralization of power away from local banks. They also argued that the bank violated the constitution because the constitution authorized Congress to regulate weights and measures and issue coined money but not mint bills of credit. Madison believed the power would have been explicitly laid out in the constitution and this issue fell to the states through the Thirteenth Amendment . Despite some reservations, Washington sided with Hamilton and the Congress passed the act authorizing its creation. Along with the Bank, the Congress created the United States Mint and the United States Dollar. Congress chartered the First Bank in Philadelphia and the First Bank Building was finished in 1796. It remains in Philadelphia to this day under the administration of the National Park & Historic Service.
In order to pay the new bondholders who were financing shipbuilding and all of these financial schemes, the U.S. needed revenue. Congress created the U.S. Revenue Cutter Service in 1794 from the various state coast guards to police the waters of the United States and prevent smuggling and other authority dodging schemes. This helped, but import duties would not support the new government alone. Hamilton determined an excise tax was necessary to raise the revenue in question but heated debate erupted over what to tax. Attempts by the Atlantic states to tax the fur trade and refined sugar fell apart less Québec or the Caribbean revolt. Ultimately, the decision makers chose domestically distilled spirits. The Administration decided on spirits because it was something that would be shared across the country, whether it be the whiskey drinking interior or the rum drinking coasts . Hamilton viewed it as a luxury tax and there was support from moral reformists who liked the idea of a sin tax. The deeply unpopular Distillers Act took effect in 1793. What some viewed as a sin tax in the coastal cities was a painful economic burden in some places. Frontier farmers traditionally distilled their excess grain into whiskey. Not only did this prevent crops from rotting but also it provided a valuable second source of income. In the Caribbean, the tax was massively disruptive. On English-speaking islands, traditional rum was, and still is, made from molasses, a by-product of the sugar refining process. The tax put tremendous financial pressure on distillers who often converted the countless excesses of molasses into rum. On the French-speaking islands, rum was, and still is, traditionally made directly from cane juice. To counter the tax, French planters began refining more sugar cane, but this only led to more competition on the refined sugar market while resulting in yet more excess molasses. To further complicate matters, rum was often used as an exchange medium in the slave trade. The increased price of rum led to an increased price in the cost of slaves. Because of the popularity of rum on the coasts (whiskey was an interior drink) the costs transferred along to just about every sector of the American public.
By 1796, protestations became rebellion. Local populations tarred and feathered tax collectors as they had two decades before. Court proceedings and mail deliveries were routinely interrupted. Rebel organizers cropped up in western Pennsylvania, Ohio Country, western Virginia and Kentucky. Rum revolts were breaking out in the Caribbean and the fledgling U.S. Navy found itself combating a marked increase in piracy and smuggling.
Washington, fearing a repeat of Shay’s Rebellion a few years before, moved quickly. Federal Marshals were dispatched to bring tax evaders to court. The Revenue Cutter Service and every newly finished navy ship were dispatched to the Caribbean. Washington called on the governors of the various states to raise their militias and restore order. Carleton, Hamilton and Henry “Lighthorse Harry” Lee led nearly 13,000 troops to the frontier and quickly and efficiently put down the rebellion. Washington, in a supreme show of force, sailed for Barbados and took command of the local militia and naval forces as Commander-in-Chief. The bold action by Washington was critical to alleviating Caribbean fears that they had traded one distant ruler for another. Washington cemented his legacy by pardoning the few rebel leaders the marshals managed to round-up. While the quick actions ended violent protests, the tax continued to be a contested political issue.
What wasn’t contested in all of this was the Election of 1793. The fledgling political parties of the day, the Federalists and the Democratic-Republicans, both threw their support behind Washington but did compete for Vice President. The Federalists continued to support John Adams while the Democratic-Republicans rallied around George Clinton, the Governor of New York. The Federalist ticket was hardly a debate but the internal politics of the Democratic-Republicans is of interest. Jefferson and Madison were both floated as potential nominees but the presidential selection process at the time made this a nonstarter. In those days, each elector cast two votes and the candidate with the most would win the presidency while the runner-up would take the vice presidency. Indeed, Washington won a vote from each elector. Because of this system however, Jefferson or Madison could not run because electors were not permitted to vote for two candidates from their home state. A satisfactory candidate was not found amongst the Caribbean states and Jean Pierre Rochambeau of Québec refused nomination. Samuel Adams refused to run against his cousin. Clinton, eventually, accepted the nomination.
It is untrue to call the 1793 campaign a contest between Federalists and Democratic-Republicans. The parties were still developing, a formal nominating process did not exist, Washington was the agreed upon candidate, and no real local party structures existed on the ground in the various states. If anything the contest for the vice presidency, and those seats up for grabs in Congress, could be seen as a contest between Hamiltonian treasury policies versus Democratic-Republican and lingering anti-federalist idealism. Certain ethical rules were not in play yet either. Clinton was actively running a campaign for the vice presidency while defending his governorship of New York against John Jay, the sitting Chief Justice of the Supreme Court. In the end, Washington carried the day while the Federalist electors remained united in their support of Adams. The confused Democratic-Republican electors split their votes between Clinton, Jefferson and Aaron Burr.
The dominant Washington victory would be the last time the country did not have to suffer through party politics in an election, or so it was believed. It was known by the start of his second term that Washington would not seek a third term and no potential candidate, not even Carleton, could unite the country as resolutely as Washington. This meant the 1797 election would be a true contest. Furthermore, squabbles over Hamiltonian economic policies, and the subsequent Rum and Whiskey Rebellion, strengthened the embryonic position of the Democratic-Republicans. What started as Jefferson’s and Madison’s personal opposition to Hamilton’s economic plans turned into a new plight of the anti-federalists. The battle against the constitution now turned into a battle to limit the power of the federal government. Jefferson and Madison began rallying the support of old anti-federalists and the peripheral states. Hamilton, at the same time, began organizing his own party to succeed Washington’s term. This Federalist Party believed in pragmatic policy and a strong federal government that could unify and protect American interests. As the parties established themselves, major differences cropped up over foreign policy and the central pivot of those policy decisions was France.
: Remember this is our timeline’s Tenth Amendment
: In those days, rum, not whiskey, was the dominant spirit in North America. Whiskey only gained the popularity we know in our timeline when rum became more expensive after independence and the disruption of trade between North America and the Caribbean. To counteract this expense, interior settlers began distilling whiskey from local supplies of grain and corn. As an added economic incentive that helped to popularize whiskey, excess crops that otherwise would have rotted were frequently distilled for future sale.